GTX · Garrett Motion Inc. · Stock research

Reference close: $26.62 (2026-08-21 adjusted daily bars). All price levels below are market levels.

GTX — Garrett Motion Inc.

Current Thesis

The $29–30 shelf that framed the datacenter-cooling re-rate is gone. Garrett closed $29.85 on 2026-08-07, $27.91 on 2026-08-18, traded $27.75–$28.33 on 2026-08-19, and closed $26.62 on 2026-08-21 — 26.5% under the $36.23 closing high set 2026-06-30, RSI(14) at 23.0, a three-month price change of -19.8%. The slide ran through the two events most likely to arrest it: JP Morgan maintained Overweight and raised its target to $37 on 2026-08-10, and CFO Sean Deason plus SVP Strategy Nils Martens held a fireside chat at the J.P. Morgan Automotive Conference on 2026-08-12 (announced 2026-08-04). Nothing measured in the business broke — FY26 guidance was raised on 2026-07-29 to $3.7–3.9B sales and $560–600M adjusted EBIT. What broke is the multiple the oil-free cooling story bought, which the 2026-07-29 call dated to 2027 at the earliest. The narrative leg is dead: the structure that carried it has failed and fresh bullish marks are being absorbed without a bid. The cash-cow turbo business is a separate question and is not what re-rated the stock from ~8–9x to ~18x.

Bullish and bearish views on Garrett Motion Inc.

The model's bull view on Garrett Motion Inc. (GTX), in brief: Q2 CY2026 (2026-07-29) beat both lines. Net sales $976M (+7% reported, +5% constant currency) vs $965.45M consensus; EPS $0.53 vs $0.45; net income $101M; record adjusted EBIT $152M at a 15.6% margin, +200bps; adjusted FCF $122M; cash $158M. Guidance raised on all four measures… The bear view: The best print of the cycle, an upgrade and a target raise all failed to hold a level. Both cases follow in full.

Bull Case

• Q2 CY2026 (2026-07-29) beat both lines. Net sales $976M (+7% reported, +5% constant currency) vs $965.45M consensus; EPS $0.53 vs $0.45; net income $101M; record adjusted EBIT $152M at a 15.6% margin, +200bps; adjusted FCF $122M; cash $158M.
• Guidance raised on all four measures (2026-07-29). FY26 net sales $3.7–3.9B (from $3.6–3.9B), net income $330–360M, adjusted EBIT $560–600M, adjusted FCF $385–475M; management framed the midpoint at $3.8B / $580M / $430M.
• Datacenter exposure now sits inside a guided number. FY26 industrial turbo sales taken to approximately $200M from a prior "$100M-plus," with more than $80M booked in H1 and a disclosed production award for MEG turbos used in datacenter gensets (2026-07-29 call).
• Every named sell-side mark is above the tape. JPM Overweight $37 (2026-08-10), Deutsche Bank Buy $36 on its 2026-07-30 upgrade, Stifel Buy $36 (2026-05-14) — against a $26.62 close on 2026-08-21.
• Capital return is still funded. $135M of the $250M 2026 repurchase authorization remained at 2026-06-30 after $87M in Q1 and $28M in Q2; $0.08/sh dividend payable 2026-09-15; 186.8M shares outstanding at 2026-06-30.
• Momentum is stretched the other way. RSI(14) 23.0 on 2026-08-21, against the same indicator flagging GTX as an overbought consumer-discretionary name in a 2026-05-12 Benzinga screen.

Bear Case

• The best print of the cycle, an upgrade and a target raise all failed to hold a level. $29.92 close 2026-07-28 (pre-print) → $29.85 on 2026-08-07 → $26.62 on 2026-08-21, with the JPM $37 mark landing 2026-08-10 inside that slide.
• The July raise mostly lifted the floor. Sales guidance moved $3.6–3.9B → $3.7–3.9B; the top of the range did not move.
• Cooling revenue is a 2027–2028 event. CEO Olivier Rabiller put first E-Cooling production shipments in 2027 and datacenter-specific applications "between the end of 2027 for data centers and beginning of 2028" (2026-07-29 call). Nothing between now and then converts the story into reported revenue.
• Insider distribution into the highs with no disclosed offsetting purchases. CFO Sean Deason sold 110,000 shares at $31.93 (2026-06-05); SVP Thierry Mabru sold 70,000 shares at $32.99–$33.00 (2026-05-29, Form 4 accepted 2026-06-01).
• The buyback pace halved as the stock fell. $87M repurchased in Q1 versus $28M in Q2; the company did not step up into the drawdown, and $135M of authorization is what remains.
• Core P&L is cyclical. The revenue that funds the story is light-vehicle and commercial-vehicle turbochargers, exposed to production schedules and to FX — the 200bps gap between +7% reported and +5% constant-currency growth in Q2 shows the currency component.

Setup & Price Structure

• The prior shelf is now overhead. Price was contained between roughly $29 and $31 from 2026-07-28 through 2026-08-07; the 2026-08-21 close of $26.62 sits below that entire band, so the old support is resistance.
• Distance and speed. -26.5% from the $36.23 closing high of 2026-06-30, -6.12% in the week to 2026-08-19 per third-party quote data, market capitalisation roughly $5.21B on the same date.
• Oversold without a base. RSI(14) 23.0 at the 2026-08-21 close, with the 2026-08-19 session bracketed $27.75–$28.33 and the following prints lower. An oversold reading marks velocity; no higher low has printed since 2026-08-07 in the daily series.
• Crowding and positioning observables. Three published targets ($37, $36, $36) sit 35–39% above the last close, a spread that has widened as price fell rather than closing; officers sold at $31.93 and $33.00 in late May/early June with no disclosed open-market buying since; the company's own repurchase pace fell from $87M to $28M quarter-over-quarter; no new insider filings have surfaced in coverage since the June Form 4s. Retail-facing screens covered the name as overbought on 2026-05-12 near the top of the leg.
• Next reference below. The published frame put the leg's origin near $20 in February 2026. Between $26.62 and that area, the January–February consolidation is the structure a reader should watch; nothing in the June–August range now sits underneath.

Catalyst Calendar (next 30 days)

• 2026-09-15 — $0.08/sh quarterly dividend payable, declared with Q2 results. Confirms capital-return cadence; advances nothing in the cooling narrative.
• ~2026-10-28 (est.), outside the 30-day window — Q3 CY2026 results, not yet formally scheduled; Q2 landed 2026-07-29. First check on whether H2 industrial turbo tracks toward the ~$120M implied by the ~$200M FY26 figure against $80M-plus in H1, and the next window for any dollar figure attached to E-Cooling.

Elapsed catalysts

• No scheduled company presentation — the 2026-08-12 J.P. Morgan Automotive Conference fireside chat (announced 2026-08-04) has come and gone with no guidance update issued alongside it, and no further appearance is on the calendar within the window. (passed 14d ago)

What Would Change Our Mind

The read that the re-rate leg is finished depends on one observable: good news no longer producing a bid. That has held from 2026-07-29 (beat-and-raise) through 2026-07-30 (DB upgrade) to 2026-08-10 (JPM $37). It would be wrong if the August drawdown is a valuation reset inside an intact business trend — a weekly close back above $30, ideally with Q3 repurchases above the $28M Q2 pace, would say the drawdown was flow rather than a narrative failure. On the downside the structure question is gradeable: a weekly close below $25 gives up the whole June–August range and puts the February 2026 origin of the leg back into the frame. On the fundamental side, an FY26 sales guide cut beneath the $3.7B floor at the Q3 print, or a Q3 call that restates the 2027 first-shipment window later, would move the break from multiple to earnings.

Correlation Notes

• Datacenter-cooling complex. Garrett's cooling exposure is routed through partners — the multiyear oil-free centrifugal compressor module partnership with Ingersoll Rand announced 2026-05-12 — so cooling-adjacent tape and any rollout commentary from those partners moves GTX before any Garrett revenue does.
• Auto-supplier cyclicals. Q2 net sales of $976M come overwhelmingly from light-vehicle and commercial-vehicle turbochargers; light-vehicle production data and OEM schedules drive the number that funds everything else.
• FX. Reported growth ran 200bps above constant currency in Q2 CY2026 (+7% vs +5%), so a dollar move reads directly into reported sales against the $3.7–3.9B guide.
• AI-infrastructure beta. The stock trades with the AI-datacenter basket on a revenue line that does not yet exist in the P&L; that asymmetry is why a basket drawdown hits the multiple harder than the guide.